Why We Invested · Bessemer Venture Partners
Why the firm invested
Bessemer led Hibob's $7 million seed round in September 2015 primarily due to the strength of the founding team despite market uncertainty.
The market opportunity may have been hazy, but the Hibob team was objectively strong, and so despite some consternation of some of our colleagues, Bessemer signed a term sheet to lead a $7 million seed round in September 2015.
Problem
Fast-growing small-midsize companies are underserved, left choosing between basic small business tools and expensive enterprise platforms.
Hibob recognized that while tiny sub 50 employee organizations had several good options to choose from (even free options), small growth companies were left with little choice but to go with the old-school, expensive platforms offered by enterprise HR platforms.
Product
Hibob provides a core HR platform targeted at small-midsize, multinational growth businesses with 100 to several thousand employees.
Affectionately known by customers as “bob,” Hibob is a core HR platform aimed at small-midsize, multinational growth businesses with 100 to several thousand employees.
Traction
Hibob achieved over 1,500 global customers and 160% year-over-year growth.
With more than 1,500 customers around the world and growth of 160% year-over-year, Hibob is just scratching the surface of the market opportunity in HRIS and people management platforms.
Hibob maintained over 100% annual revenue growth since 2018 alongside exceptionally low logo churn.
In all fairness, Hibob was always a relative “fast grower” never dipping below 100% annual growth since launching in 2018. Most encouragingly, the company always had exceptionally low logo churn
Hibob transformed from one of the most inefficient SaaS companies in Bessemer's portfolio into one of the most efficient.
Hibob went from one of the most inefficient growers in the Bessemer portfolio to among the most efficient.
Risks the investor named
In its early stages, Hibob suffered from poor sales efficiency metrics and high customer acquisition costs due to product limitations.
But among their peers in the Bessemer portfolio, Hibob was an outlier in that it was demonstrating woeful sales efficiency metrics, which limited the company’s ability to grow faster or even maintain its growth without burning through its cash.
What founders can learn
- What actually moved the decision: Bessemer Venture Partners wrote that Bessemer led Hibob's $7 million seed round in September 2015 primarily due to the strength of the founding team despite market uncertainty.
- The traction evidence that carried weight: Bessemer Venture Partners wrote that Hibob achieved over 1,500 global customers and 160% year-over-year growth.
- The risk the investor named out loud: Bessemer Venture Partners wrote that In its early stages, Hibob suffered from poor sales efficiency metrics and high customer acquisition costs due to product limitations.
Source and provenance
Why We Invested published by Bessemer Venture Partners on bvp.com (first-party source). Read the original
